Refute Opposing view: then, say why the opposing view does not work and why your argument is logical

and valid.

Case: 7.4 The fight of the redwoods

DENSE FORESTS OF COASTAL REDWOOD TREES once covered 2.2 million acres of southern Oregon and northern California. Today, only about 86,000 acres of virgin redwood forest remain. Most of this is in public parks and preserves, but about 6,000 acres of old-growth forest are privately owned—nearly all of it by the Pacific Lumber Company, head- quartered in San Francisco. Founded in 1869, Pacific Lumber owns 220,000 acres of the world’s most productive timberland, including the old- growth redwoods. For years, the family-run company was a model of social responsibility and environmental awareness. Pacific Lumber paid its employees well, supported them in bad times, funded their pensions, and provided college scholarships for their children. It sold or donated nearly 20,000 acres of for- est to the public, and instead of indiscriminate clear-cutting, the company logged its forests carefully and selectively. Throughout its history, the company harvested only about 2 percent of its trees annually, roughly equivalent to their growth rate. After other timber firms had logged all their old-growth stands, Pacific Lumber had a virtual monopoly on the highly durable lumber that comes from the heart of centuries-old redwood trees.106 Because Pacific Lumber was debt-free and resource-rich, its potential value drew attention on Wall Street, where the firm of Drexel Burnham Lambert suspected that the company was undervalued—and thus ripe for raiding. In 1985, Drexel hired a timber consultant to fly over Pacific Lumber’s timberland to estimate its worth. With junk-bond financing arranged by its in- house expert, Michael Milken, Drexel assisted Charles Hurwitz, a Texas tycoon, and his firm, Maxxam, Inc., to take over Pacific Lumber for $900 million. After initially resisting the leveraged buyout, the timber company’s directors eventually acquiesced, and by the end of the year Hurwitz and Maxxam had control of Pacific Lumber. At the time, Hurwitz was primary owner of United Financial Group, the parent company of United Savings Association of Texas. In exchange for Milken’s raising the money for the takeover of Pacific Lumber, Hurwitz had United Savings purchase huge amounts of risky junk bonds from Drexel. Three years later, the savings and loan failed, and taxpayers were stuck with a bill for $1.6 billion. The takeover of Pacific Lumber left Maxxam with nearly $900 million in high-interest debt. To meet the interest pay- ments, Maxxam terminated Pacific Lumber’s pension plan and replaced it with annuities purchased from an insurance com- pany owned by Hurwitz. Worse still, Maxxam tripled the rate of logging on Pacific Lumber’s lands, and it was soon clear that Hurwitz intended to log the now-famous Headwaters forest, a 3,000-acre grove of virgin redwoods—the largest single stand of redwoods still in private hands. “It was the reason we were interested in Pacific Lumber,” Hurwitz says. And one can see why. The value of the grove is astronomical: Milled into lumber, some of the trees are worth $100,000 each. The potential lumber may be worth a fortune to Hurwitz, but environmentalists consider the Headwaters grove to be price- less as it is, and they stepped in to do battle with Hurwitz. They see the Headwaters forest with its 500- to 2,000-year-old trees as an intricate ecosystem that took millions of years to evolve, a web of animals and plants that depend not just on living trees but also on dead, fallen redwoods that provide wildlife habitat and reduce soil erosion. Some of these activists—including Darryl Cherney, a member of the environmental group Earth First!—have devoted their lives to stopping Hurwitz. Earth First! is not a mainstream conservation organization; it has a reputa- tion for destroying billboards, sabotaging bulldozers and lumber trucks, and spiking trees with nails that chew up the blades of saws. “Hurwitz is a latter-day robber baron,” Cherney claimed. “The only thing that’s negotiable . . . is the length of his jail sentence.” Other environmental organizations opposed Hurwitz in court. The Sierra Club Legal Defense Fund and the Environmental Protection Information Center filed sixteen lawsuits against Pacific Lumber, giving the company’s legal experts a run for their money. One of these suits bore fruit when a judge blocked the company’s plan to harvest timber in a smaller old-growth forest known as Owl Creek Grove. The legal reason was protection of the marbled murrelet, a bird about the size of a thrush, which breeds in the forest and is close to extinction. The judge also noted that “after the logging of an old-growth forest, the original cathedral-like columns of trees do not regenerate for a period of 200 years.” Pacific Lumber appealed the Owl Creek decision, but the ruling was upheld a year later. However, at the same time, the company won the right to appeal to another court to be allowed to harvest timber in the larger Headwaters forest. Meanwhile, both conservationists and a number of public offi- cials were making strenuous efforts to acquire Headwaters and some surrounding redwood groves from Hurwitz. Some environmentalists, however, worried that too much attention was being directed toward saving the 3,000-acre Headwaters grove while leaving Pacific Lumber free to log the rest of its land with abandon. They were less concerned about the murrelets in particular or even the redwoods themselves; rather, what disturbed them was the dismantling of an ancient and intricate ecosystem—an irreplaceable temperate rain for- est, home to some 160 species of plants and animals. Their aim was to build a new style of forestry based on values other than board feet of lumber and dollars of profit. They sought sustain- able forest management and a new resource ethic devoted to rebuilding and maintaining habitats for coho salmon, the mur- relet, the weasel-like fisher, and the northern spotted owl. As a first step, these conservationists called for protection not just of the 3,000 Headwaters acres but also for an area nearly twenty times that amount, called the Headwaters Forest Complex. This tract included all the ancient redwoods that Hurwitz owned and large areas of previously logged forest. “We have a vision that’s bigger than Headwaters,” said Cecelia Lanman of the Environmental Protection Information Center. Her vision was definitely more sweeping than that of the Pacific Lumber workers in Scotia, California, a village contain- ing 272 company-owned homes. Because Hurwitz instituted stepped-up logging, which meant more jobs, his employees tended to side with him, not the environmentalists. Workers said that Hurwitz had reinvested more than $100 million in modernizing his mills and had kept up the tradition of paying college scholarships for their children. The environmentalists were the real threat, said one employee. “You’ve got a group of people who hate Mr. Hurwitz, and they’re using the Endangered Species Act and anything they can to hurt him. And we’re caught in the middle.” The Story Continues . . . In 1999, Hurwitz signed a deal negotiated by Senator Dianne Feinstein and Deputy Interior Secretary John Garamendi. In exchange for a 7,500-acre tract that includes the Headwaters grove and 2,500 additional acres of old-growth forest, the U.S. government and the state of California agreed to pay Pacific Lumber $480 million (half of what Hurwitz originally spent for the entire company with its 220,000 acres of timberland). The agreement banned logging for fifty years on 8,000 other acres of company land in order to safeguard the murrelet, and it set up buffer zones to protect the river habitats of endangered coho salmon and steelhead trout. A Habitat Protection Plan regulated how and where Pacific Lumber could harvest timber on the rest of its land. However, because Hurwitz transferred the $868 million debt that still remained from his original hostile takeover of Pacific Lumber from Maxxam to Pacific Lumber itself, the company still needed to log as much as it could to make its interest payments. Pacific Lumber, for its part, contended that state and federal agencies were so rigidly enforcing the habitat conservation plan that it couldn’t cut enough lumber to keeps its mills running, and it decided to close down Scotia’s 104-year-old mill. “We are being strangled by the operating restraints,” said Robert Manne, president of Pacific Lumber, which are “not working to meet the company and its employees’ economic needs.” To this complaint, conservationists and governmental officials responded that Pacific Lumber, which continued to operate two smaller and much newer mills in neighboring towns, was scapegoating them for problems stemming from falling timber prices and the company’s depletion of its old-growth redwood groves by clear-cutting. According to Paul Mason, president of a local environmental organization, “The lumber market is right in the tank, and that takes a bite out of your profit margin. The company has been operating at an unsustainable level for a number of years.” Whatever the exact cause, Pacific Lumber eventually declared bankruptcy, and in 2008, as part of a court-supervised reorga- nization plan, it was taken over by the Mendocino Redwood Company, a nine-year-old logging venture owned by Don and Doris Fisher, the founders of Gap. Environmentalists, state offi- cials, and local residents were thrilled at the prospect of Pacific Lumber Company emerging from bankruptcy free of Hurwitz and Maxxam and able to reestablish itself as an environmen- tally responsible company practicing sustainable forestry. That’s because, as U.S. bankruptcy judge Richard Schmidt explained, “MRC [is] an experienced, environmentally responsible operator with a proven track record, and whose experience in operating timberlands and working cooperatively with government regula- tors was uncontroverted.” As for the town of Scotia, the bankruptcy court awarded its 272 homes, two churches, hotel, and handful of commercial buildings to a hedge-fund group, Marathon Asset Management, which had been a big creditor of Pacific Lumber. Marathon executives say they are trying to do right by the residents, main- taining the homes and keeping rents reasonable. “We didn’t want to fire everyone in the town and close it down, chop down the trees and call it a day,” says Marathon’s chief operating officer, Andrew Rabinowitz. As of 2014, the hedge fund had sold or put on the market the town hall and a few other buildings. Eventually, though, it wants to get out of the landlord business, sell the homes, and recover at least part of the $160 million it had been owed by Pacific Lumber.

Tutor Answer

Surname 1
Name:
Institution:
Instructor:
Date:
Discussion Post
Argument: morally speaking it is very clear that the environmentalist and the conservationist had
varied reasons as to why they opposed the move of pacific lumber company being taken over.
Premise 1: in its original state when the company was to take over it was doing everything
possible...